A Few Nudges to Get Housing Going

We just need a little push, a little more work, a little more money, a little more breathing room from FNM/FRE and, alas, one more rate cut-(which of course we didn't get) in order to get this housing market going.

We got another confirmation of what Toll Brothers (TOL - commentary - Cramer's Take) told us, that the cancellation rate, is going lower. This news came from Standard Pacific (SPF - commentary - Cramer's Take). Oh boy is that ever not a great builder.

I wanted the rate cut so the big banks could re-liquefy and keep lending. While Bob Steel from Wachovia (WB - commentary - Cramer's Take) reassured me last night that there could be a turn in housing late next year, he made it clear that a cut would hasten it by giving banks more room to make loans and adjust bad loans.

The latter's the most important because it is a one-on-one kind of change to fix these mortgages, but it is happening.

Watch the HGX. It is still well above where it was back on the July 15th intra-day low. The stocks are still going up even with this Fed in part because the regional banks as represented by the KRX, the Keefe Bruyette Regional Bank index.

But let's not mince words. A rate cut is what we need for Wachovia, Washington Mutual (WM - commentary - Cramer's Take), Bank of America (BAC - commentary - Cramer's Take) and Citigroup (C - commentary - Cramer's Take).

We need insurance. That's how we get housing price depreciation to stop.

Random musings: we are seeing the denouement of AIG no matter what, either through bankruptcy or through some sort of conservatorship that will allow everyone to compete against them because the insurance group's going crazy

I think the shorts tried to break Goldman Sachs (GS - commentary - Cramer's Take) and Morgan Stanley (MS - commentary - Cramer's Take). Goldman had a great quarter, no big write-downs. I bet Morgan Stanley's okay, too.

At the time of publication, Cramer was long MS and GS.

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